Salmond told by Yes colleagues: prepare to dump the pound

Senior figures in the Yes campaign will tomorrow urge First Minister Alex Salmond's government to come up with an alternative strategy for an independent Scotland's currency after the main Westminster parties ruled out sharing the pound.

Key members of Yes Scotland are expected to use an official board meeting to argue that adopting a new currency should be considered instead of Salmond's vision of sharing sterling in the long term with the rest of the UK (rUK).

But the First Minister shows no signs of changing his mind. In a speech tomorrow, he will repeat his argument that the pound is "as much Scotland's as the rest of the UK".

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Senior figures such as Yes Scotland chair Dennis Canavan have backed a new currency but recognise that sterling would likely be in place on day one of independence.

Supporters of replacing the pound have so far accepted the SNP's longer-term currency union policy on the grounds that the Scottish Government has a mandate to pursue its favoured option.

But interventions last week by Chancellor George Osborne, shadow chancellor Ed Balls and LibDem Cabinet Minister Danny Alexander have shifted the goalposts.

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All three said they would refuse to agree a formal currency and urged Salmond to come up with a "plan B".

Senior Yes campaigners believe holding the currency union line is untenable and must be revisited.

It is believed the option of a new currency will be discussed. A Yes source said: "Nobody likes what Osborne said, but his speech cannot be ignored. Going into a referendum campaign with a policy that has been ruled out is not a great strategy. There's a patent need to discuss an independent currency."

Another Yes insider said: "If the Scottish Government wants to have a strong negotiating position, it has to have a fall-back position.

"We need a broader perspective, rather than just one option. There are a range of voices saying we need to keep the independent currency option open."

The views confirm divisions in the Yes movement on how to react to Osborne's speech. Blair Jenkins, who is the chief executive of the cross-party Yes campaign, last week echoed the SNP position. "Our plan is to have a currency union with the rest of the UK," he said.

Deputy First Minister Nicola Sturgeon, who has staunchly supported a currency union, is also a member of the Yes advisory board.

In a speech tomorrow to Business for Scotland, a pro-Yes group, Salmond will stick to his strategy of attacking Osborne. He will say: "The reality is the pound is as much Scotland's as the rest of the UK. By suggesting otherwise, the Westminster establishment - Tories, Labour and LibDems - are reaping a backlash from the ordinary people of Scotland, who feel this is an attempt to bully Scotland ahead of the democratic choice we all look forward to this September.

"I will be deconstructing the Chancellor's ill-thought-out and misinformed intervention point by point, making clear why a currency union not only favours Scotland but is in the clear economic interests of the UK as well."

The First Minister wrote to David Cameron about newspaper claims that a Yes vote would not necessarily lead to independence.

A senior Coalition source was quoted in The Herald last week saying: "If Alex Salmond made impossible demands, we would not just roll over and agree to everything he wanted. If we could not reach agreement, the status quo would be the default option."

In his letter to Cameron, Salmond said: "This runs counter to the letter and spirit of the Edinburgh Agreement, and I urge you to distance yourself from this position as quickly, and as publicly as possible."

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A spokesperson for Yes Scotland said: "The Scottish Government has laid out a detailed blueprint for independence in its White Paper upon which the people of Scotland will be asked to vote in September. All those in Yes Scotland are agreed that by voting Yes we will be taking the most important step in our journey to independence.

"In the first election to an independent Scottish Parliament, the people will choose the government they want to take Scotland forward, based upon the manifestos on offer."

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